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Various companies provide country risk ratings to clients, but firms vary widely in how they reach their conclusions.
COUNTRY RISK RATINGS have been heavily used by international companies for years. In the era of globalization, the ratings are used as the basis for travel policies, insurance premiums, calculation of hardship allowances, or simply to gain context as to how the risks in one nation stack up against those of another. While the use of these ratings is broadly consistent, the way they are determined by risk management companies is not.
Annapolis, Maryland-based travel intelligence firm iJET, for example, polled its top clients to determine what would be the most sought-after factors to include in its country risk rating system. iJET wanted a distinctive guide that was comprehensive and reliable, says Sarah Slenker, a senior security analyst who was instrumental in its development. By letting clients help to shape the criteria, the company knew the system would be both unique and useful.
The results of the polling led ijet to select six categories for its ratings: crime,...